Surge in Home Delisting

[Ella Compton]

Delistings: homes pulled off the market without selling. Delistings are up nearly 50% year over year, especially in cooling markets. Sellers are holding out for high prices, but buyers aren't biting due to affordability pressures. It's a subtle but telling sign that the market is adjusting to a disconnect between seller expectations and buyer realities. 

Would you hold off and wait for better conditions, or adjust your price to attract today's buyers? 

[Ken M.]

Quote from @Jeremy Horton:

I am one of the ones that delisted

I listed a rental that I would have liked to sell but didn't need to sell. We got a decent amount of activity, especially at first but most of the offers were much lower or asking for some sort of concession. 

We started at 220k and reduced to 199k over a few months - got a couple offers in the 185-190k range, but they were still asking for buyer credits at the sale - average probably 5k or so. Then we would have had an inspection on top of it - I'm sure they would have nickel and dimed here, so we would've settled around 180k or so. Add in agent fees and it's a no-go. I never understood the seller paying for the buyers agent (why would I pay someone to negotiate against me?)

So exactly - the offers didn't match the expectation of the sales price. Maybe my expectation was off. The crazy thing is the house appraised for 193k in Jan 2023. I purchased for 162k and put in about 25k over the past couple of years. Not my proudest purchase by a long shot but the location is prime. It rents for $1600/mo. Mortgage payment is ~1280. So I'll take the tax deductions, loan paydown, and probably breakeven (or lose a little) all things considered. Not an investment I'd make today - that was the reason I wanted to sell. 

At this point I'll hold for better conditions - I need to calculate the full ROI, but it's really the opportunity cost of the equity that gets me. Then again it diversifies my portfolio to an extent. If I listed it again, I'd sell it occupied or list it once it goes month to month. And I'd list for sale/lease at the same time and do whichever came first.

Keep in mind that you do have the right to sell For Sale By Owner. The selling amount in those scenarios is limited to how much the appraiser says it is worth to the lender, of the borrower who does the new buyer's loan.

That is, the appraiser will try to make the deal work, but is limited to what has actually sold around you. That is the number the lender will base their loan amount on, not the amount agreed to in the purchase and sale agreement.

I have sold many FSBO over the years, always getting more than the agents said I would. I had to be involved in the deal though, that's all. If someone doesn't want to deal with the negotiation, closing and such, then an agent makes sense.

There are services that for $300 to $600 will list the property in the MLS. An attorney charges about $1,000 to take care of the paper work. Always get a title report, always close with an attorney or escrow company and you're as safe as using an agent. Maybe more so.